MFW by 50?

gaffel

OK so thought about it, didn't take long . % target will be LTV. Currently at 40% so next target would be 30% which is c.75k :j

gaffel

Grrrrrr still no sign of my overpayment. *grumps*

I was reading more MFW last night (become a bit of an obsession) and I picked up a few thoughts/tips from them.

1. Should I have a treat to purchase for myself once MF? I don't at present and not sure what I would want. Promised mrgaffel a new car but nothing I really want. Not really into cars, though I was just about to trade in my 3 year old car for a new one this July but decided not needed and keep the cash for other stuff. I will ponder more.

2. This is much more than just a mortgage journey. It's a sort out the future journey, with MF just being step one. The next steps are to be determined. I think from reading a lot I will be looking at a mixture of pension, investments and buy to lets for income. Off course we have our companies and we can either sell or continue to take income from them, but the conservative part of me is ignoring that, it will be a bonus if it is still going! I see far too many companies go under to rely on it. I guess that thought was the whole start of this process, diversification of risk with not having all eggs in one basket.

3. Many diaries talk of the dream of retiring early. Again, no plans on this side. I love my work (I guess being the boss helps). I take days off when I want, only work afternoons and generally just love it. However, when I left UK I did so to leave a stressful (but very well paid) job to have the easier (but much worse paid job). So perhaps I have already have had this, where I have adjusted from the daily grind of work to doing something I enjoy. I work with mrgaffel and generally, its a ruddy good laugh! I am 42 and no intention to retire within the next 20 years, when I don't know and how to plan for that, again I don't know! Perhaps when grandchildren come along (a long way away!) it might change our perspective.

4. Is this my dream forever home? No. Its a fab 4 bed double fronted detached in an AONB, I have spectacular views, most would kill for, and a very long way from where we lived in UK (in a grubby suburb of a major city). But.... but.... it is just not quite there. It has an OK garden but we want a little bit of a small holding. Will we ever find it? Who knows. I think, once this mortgage is cleared, we will set up a savings pot for our forever home. We would need about 150++ on top of ours in this area.

It is clear, once the mortgage is cleared, there is a lot to split our wages into. From pension, to forever home saving pot, to buy to lets and investment funds. How we split, well, a LOT to research.

Fancynancy77

Wow gaffel. Those OP's are amazing. Knocking chunks off like that and you'll be MF in no time. I totally empathise about lack of financial products and competition here in ROI. And delivery charges from likes of Amazon or EBay are extortion. Quidco etc. are unheard of.
But hey ho . . .
I changed to perm tsb free banking last year as I was paying about €100 in charges. Tried to get my OH to change but he says it's too much hassle. What can you do. Just take the small wins when living with a spendthrift :rotfl:

I've pushed in years as a single parent too and am very grateful for what I learned in those years. I can make a fiver last the week. Hard times but also very simple and happy.

SavingRaven

Hi Gaffel,

Just read your diary - amazing job on the OPs. Totally agree that MF is just a step on a bigger journey. I also have almost no pension/ longer term savings so need to think about that alongside the mortgage.

Really enjoying your diary and keep up the good work.

SR

PS - hope the OP shows soon!

gaffel

Thanks for popping in Fancynancy77 and SavingRaven

Fancynancy77 - oh the ROI banks just .... just... just... wind me up so much! :mad: I look at all the options in the UK and get so jealous. That said I am lucky in some respect that most of businesses are NI based so we have delivery there. I use top cashback on business expenses where I can (hotels etc) and got £780 back last year. Just had another £50.22 from them yesterday.

You have also reminded me I have got on to permanent tsb three times and requested ring backs to open a new account, and never got them! So just rang up now and just need to go into nearest branch with ID. Currently with A1B and hate them!

SavingRaven - yep I am changing a whole mindset here, and no, still no sign of OP!

Read quite a few diaries (including edinburghers) from start to finish, took loads of notes and have changed my mindset. My definite plan is to crack on at speed paying off mortgage. I know many advise against this, especially with a reasonably low rate of 2.85%, but I don't trust the vulture capitalists who have purchased this sub prime debt, and I am at an age where my mindset is, secure the family home.

However my current long term planning (post MF) will be split into 4:

1. p2p lending. Last night dipped my toe in an Irish one - L1nkedF1nance Not overly impressed with the loan quality on offer and quite shocked by some niaive investors. One company had been on there seeking funds for 9 days, and was part of a group & their P&L and B/s did not stack up. One person has noticed the absence of debtors, and this was explained as all product was sold to the hold co... well I asked a load of questions about intercompany dr/cr account late last night. Woke up this morning to find that company had withdrawn their loan application. I suspect they did not like my digging. The one thing I would consider myself reasonably good at poking through company accounts. Love it, always been a hobby of mine, so I suspect p2p lending could become my new hobby! Rates in Irish ones were 8-14%, I am bidding for 3 loans all at 12% (with 1.2% going to linkedf1nance). Only dipping my toe in with €250 on those three loans. Will dip a bit more in, gamble up to €1000 then sit back and watch for a few months. Have applied to UK ones and whilst I am eligible, they need ID sent over so will be a while before I get access to them. Hopefully they will have a few more loans on offer!

2. Pension. The companies we run are in AE - most starting May-July 2017 so I will research and use this as our pension fund for us. Not overly excited about this but will use the tax advantages to our best ability. The companies can top up for us.

3. Buy to let. Now having had 2 b2l's before (and made money when we sold up and left UK) I am happy to dip my toe in again. That said we won't run in if the figures don't stack up. Been researching local town market. 3 bed terraced/semis rent for £600 a month and cost about £60-65k, to me that works. Put a 30% deposit down and mortgage the rest. However noticed last few got snapped up in 2 days so need to keep an eye when we have our ducks lined up. Also plan to perhaps invest in a commercial unit as the rent we pay at work is a LOT. However, having initially thought this might be our first jump, I actually think we will diversify a bit first.

4. Shares/stocks/vanguard. Yep, will dip toes into here as well as start buying some units. Need to read back over advice on this and see how is the best to do this.

Not sure on split of above, or what will come first or even when, but that is the rough outline plan. Lots and lots and lots of research to do first. One thing I am sure on though, the paltry 0.5% interest my savings are currently earning, is going to change! Going to make that money work a LOT harder!!

diamondsonly

Hi Gaffel, your diary is fab. You have just given me the idea about P2P. I hadn't considered that as an investment idea post MF..Thank you

gaffel

Well bloody hell. What a day. What a day. What a day.

The OP I made on 6th July had been rejected and sent back as it had come from a Forex currency company rather than my personal account. *sigh*. I had prewarned them it was coming but departments did not speak. With bank fees on rejection I lost 70 eur. After much faffing they said if I resend they would accept it.

Whilst dealing with forex company to send it back, my currency broker pointed out the rate was now 1.435. WOWSERS. I had planned to make another £15k payment this month as a £5k split from wages/savings/company. So I just jumped and did that. Then I thought, at that rate I might as well do a bit more from savings, so did another £10k.

Then I thought about it, looked at the company (which owed me £50k), looked at cashflow. and just did it. Turned around, asked a guy who worked for me should I, and he said yep do it. So I did. I took another £35k out of company (got a slightly lower rate of 1.431). In total I got €100,278 after fees etc. from the £50k the company owed me and £20k from savings. I still have £15K in savings so not totally wiped out, but the company bank account is looking bare!

So that's it. The mortgage is cleared. One click of a button. Then rang mortgage company and asked them for a redemption amount for next Wednesday. :beer::beer::beer::beer::beer::j:beer::beer::j:j:beer::j:beer::j:beer::j

I'm slightly 'edgy' about taking so much from the company at once, but no bills to pay there and it still has some cash with a £20k of facility not used. I also promptly rang up a good customer and said if you spend £25k and pay today I will give you 10% off. She did, money being transferred over tonight.

The lad at work pointed out to me I am at my best when cash is tight, and push the company harder. He's right. mrgaffel had no idea of my plans as he was in the cinema with the youngest gaffels. I just told him, he simply said, does that mean I get my new car. Will try and dodge that for a while

My mortgage journey was always slightly different as with savings and debts from company, it was always doable, so I feel a slight 'cheat' on this board. I'm still very proud though, the companies were started with little and have paid this off. I started the main company about 10 years ago with £100. I have put blood, sweat and tears into them. Expanded and added a few companies along the way, but today I feel proud the work has paid off and I am mortgage free.

Can I just repeat that. As of this second I have no debts. Not one. Not even a little one. :j

gaffel

So the day after you wake up doing something slightly crazy and not planned. Feels great. I'm technically not mortgage free until the euros hit my account and I transfer them in, but all but.

Off course there are a few days to go, and given my propensity for mad notions who knows what I will decide to do by Wednesday. I told one friend I had done it, paid it off and her response was, didn't you just start talking about that last month. Erm yep, May 31st my mortgage was transferred and I took a notion to pay it off. 6 weeks ago, during which time I had a two week holiday. It's fair to say I don't hang around.

So where do we go from here? I guess my plans haven't changed, just rolled forward. So today I have upped my search for a buy to let. Plenty of cheap houses in local town (which is UK, I need to assess if anybody will give me credit in UK as I live in ROI). I have banked with h$bc for 25+ years and have always had an excellent relationship with them. Run most of my businesses through them and they have always said business loans/credit no problem at all. Does this extend to personal loans though? My bank manager is doing his bi-annual meeting with me in the next week or so. He comes out to be twice a year as I refuse to travel the 1 hour to the local hsbc branch. He is lovely and thankfully we have an excellent relationship, so fingers crossed all will be well.

I probably should look in roi as well if I plan to retire here, makes sense to have some income in same currency. Lord knows where the currencies will be in 20 years time. Probably best to hedge all income 50:50, I think? who knows.

I am still waiting to hear from UK p2p to dabble in there. Pushed 250eur into an irish version but pickings were very slim to say the least, though rates higher.

So job for this weekend, research isas/pension/uk/roi and a potential buy to let! I may only have the title mortgage free for a very short period....:rotfl:

gaffel

Sometimes even I realise I need to slow down.

Found a flat, 75 seconds walk from our house. 55k (euros), rents for 525. Built about 6 years ago. At the height they went for 99, at the worst, 45 so 55 is well priced. It is immaculate. Options would be long term rentals of 525 a month or go for the holiday makers at 400 a week in summer periods. Probably former.

Done sums and I may not pay off mortgage and buy this instead, just reducing mortgage to 55k and continuing our normal monthly payments of 895. Would extend life by 4years but that is not much. Will run through figures and find out history of the flat, in a small village like ours, won't take long!

So you know less than 24 hours ago when I did a big hoo ha about being mortgage free, it appears I may have lied. :rotfl:

gaffel

So now this journey has developed into future planning:

1 P2P update. One of the irish loans I was bidding for got accepted. €100 at 12.9% but the company take 1.2% so net is 11.7%. I bid quite late and the overall rate on the loan was 12.65%, but lots at 8% and even more at 15%. I think the key here might be to bid very last minute. On over subscribed loans, go in lower, on those struggling to get the funds, go at top rate.

But on the UK ones I do need to be a UK resident, or do it via one of my uk companies. I will investigate the latter and the full tax consequences. One of the Uk ones does a guaranteed return rate (rate setter?) much lower but much safer, might be better to put the majority of the spare cash into something like this.

2. Pension. Ugh. No idea about this but I am the nominated person for our companies. The pensions board on here, don't exactly seem as friendly as the mfw board.

3. B2l : Have identified one flat right next to us. €55k with rental income of c. €525 p/m. My son knows a few people renting in the block and in a small village, easy to keep an eye on. My plan with this is build up to 4 properties, each with c.500 income, which may be a lovely retirement income. But to have them split equally between ROI and UK. I am using money I was going to pay the mortgage off with to buy the first, keeping 55k mortgage at 2.75% on the family home. I am suprisingly OK with having such a low mortgage on it. 6 weeks ago it was 151k and that scared me.

I have also found a couple of UK properties potential, priced at c. £60-£69k with income in the £500-£600 range. I need to assess if we can get UK finance on these in our own right. Meeting bank manager soon (though he is commercial so might not be much use) and can see where we are. I still have £15k savings and at end of month, spare wages should take this up to £19k.

4. Shares/vanguard/isas. Yep still more research to do. Read edinburghers fantastic post from start to finish, but need to go back through with pen and paper and make decent notes!

5. Not put this in here before but I guess the companies could potentially be included as future planning. It is coming up to the UK groups year end. We will make a small profit this year but this is after taking our wages, which I change monthly depending on what mood I am in. Due to living in ROI, it is better for us to take profit as wages rather than dividends (whcih I found out to my cost!) due to double taxation on dividends. The group would have made more but the decline in euros hit us hard as much of our income is export into euro zone. The companies are coming out the end of a couple of tough years, but we have tightened our belts, got rid of slack and inefficiencies (still more to go) and they are cash generative again. For now. I am always cautious, having seen many many many companies go under. I achieved about 90% of the aims I wanted for 2015, now time to sit, reflect and decide our 2016 strategy and aims. One of which will definitely be a lot more diversification, we are too tied to one industry. Who knows P2P may play a part of this? (We are not that cash generative but can dabble). I may also sell one, I have put feelers out in the industry as I have two companies that are two close to each other and effectively compete for more or less the same customers. No added value in merging, but could earn a little sum selling one. Going to spend time building it right up prior to any sale off course.

Well if anyone read down this far, well done for not dying of boredom!